To change accountants (ltd co). Where to begin?
Discussion
We are an SME - annual turnover exceeding £2m, multiple transactions, IT savvy, established over ten years, negative balance sheet (let this not be a red flag, we have a growth strategy that is in effect).
The relationship with our accountant has lasted for well over ten years and they do some of the non-transactional book-keeping (ledgers for bills etc), EOM payroll, management reports and EOY. In addition, they also do the year end return for the two directors (of which I am one).
The issue is that they seem to have workflow issues which results in a very slow turnaround; they only just delivered a batch of management reports for Oct, Nov, Dec 19 and we are waiting on Jan, Feb and now, March.
To that end, our EOM processes are less than optimal, but we can step up if there is confidence that we are working with a firm that will delivery in a consistent and timely manner.
The relationship has become complacent and when questioned, I am reminded that we only pay £400+VAT per month, which is too little and should be reviewed. Whenever we do meet, this is specifically discussed and he is happy to continue at that rate - it is evident that we represent easy income that he can de-prioritise when the workload becomes too much to handle.
How do we go about identifying a partner that will add value to our endeavours? We are a going concern, investing in our technology and operations, increasing sales and profits and keen to build on our years of growth to deliver profitability YoY.
Perhaps a younger firm about our age (late thirties, early forties) that is a bit tech savvy and can guide us to how we can deliver efficiencies in-house and minimise expenditure (though that's arguably not in their immediate interest)?
What is important, what questions should we be asking of ourselves and when tendering/approaching prospective firms?
Thoughts appreciated.
The relationship with our accountant has lasted for well over ten years and they do some of the non-transactional book-keeping (ledgers for bills etc), EOM payroll, management reports and EOY. In addition, they also do the year end return for the two directors (of which I am one).
The issue is that they seem to have workflow issues which results in a very slow turnaround; they only just delivered a batch of management reports for Oct, Nov, Dec 19 and we are waiting on Jan, Feb and now, March.
To that end, our EOM processes are less than optimal, but we can step up if there is confidence that we are working with a firm that will delivery in a consistent and timely manner.
The relationship has become complacent and when questioned, I am reminded that we only pay £400+VAT per month, which is too little and should be reviewed. Whenever we do meet, this is specifically discussed and he is happy to continue at that rate - it is evident that we represent easy income that he can de-prioritise when the workload becomes too much to handle.
How do we go about identifying a partner that will add value to our endeavours? We are a going concern, investing in our technology and operations, increasing sales and profits and keen to build on our years of growth to deliver profitability YoY.
Perhaps a younger firm about our age (late thirties, early forties) that is a bit tech savvy and can guide us to how we can deliver efficiencies in-house and minimise expenditure (though that's arguably not in their immediate interest)?
What is important, what questions should we be asking of ourselves and when tendering/approaching prospective firms?
Thoughts appreciated.
We handle the transaction ledgers, prepare the monthly hours (where applicable), salaries, holidays deduction etc.
They handle non-transactional ledgers, which is a nice to have as it saves us more admin in house.
Of course, they do this with a view to the necessary taxable submissions, they handle the VAT returns and quarterly EC declarations.
They handle non-transactional ledgers, which is a nice to have as it saves us more admin in house.
Of course, they do this with a view to the necessary taxable submissions, they handle the VAT returns and quarterly EC declarations.
One could argue that whether you pay the going rate or a discounted rate, you should still get adequate service. To say 'Well he's not paying us £500pcm so we'll put him at the back' is rather unprofessional. If they want £500 they should ask for it. Then you can either run with it or check out.
Sounds like the first thing you need to do is get a realistic timetable of everything you want, if you EOM's on a certain day then talk to the existing accountants about what cut off dates you need to get all your things done by to ensure that date can be worked on. Why not have this chat with the accountants and then ask what they would charge to facilitate this?
If there's a cultural difference that you're looking for then ask around - I've never seen accountants advertise much it all seems to be recommendations.
If there's a cultural difference that you're looking for then ask around - I've never seen accountants advertise much it all seems to be recommendations.
Simpo Two said:
One could argue that whether you pay the going rate or a discounted rate, you should still get adequate service. To say 'Well he's not paying us £500pcm so we'll put him at the back' is rather unprofessional. If they want £500 they should ask for it. Then you can either run with it or check out.
Well, precisely; I can see past the cheap tactic of launching a 'threat' of increase fees in order to make me look the other way. It doesn't work on me but does indicate that if someone is willing to use the 'measure of last resort', then it's time to ensure that the relationship remains amicable whilst we review our options.zedstar said:
Sounds like the first thing you need to do is get a realistic timetable of everything you want, if you EOM's on a certain day then talk to the existing accountants about what cut off dates you need to get all your things done by to ensure that date can be worked on. Why not have this chat with the accountants and then ask what they would charge to facilitate this?
If there's a cultural difference that you're looking for then ask around - I've never seen accountants advertise much it all seems to be recommendations.
I think that they are having issues with managing their workload and output and have been for a while. Every January, they are consumed by an avalanche of tax returns; he gave me a deadline of an October submission in order to guarantee timely submission. Instead, he exceeded that and I incurred a £100 fine, which he'll re-imburse. If there's a cultural difference that you're looking for then ask around - I've never seen accountants advertise much it all seems to be recommendations.
We know the monthly cut off for preparing the management reports - the 12th of every month. As I mentioned, we've been working with him for ten years, from when we both started out and over that period, they have been helpful - it seems as though our expectations are now exceeding their capabilities (or willingness, perhaps?).
By the time the third or fourth month, in succession, passes without having received our management reports, meeting the cut off doesn't matter so much and we prioritise other tasks.
Your getting a cheap service but not one that gives you full awareness of the business at a crucial time.
Would the management accounts be the priority? It is for us and found the most efficient way is to have a person who is attached to our accountants come to the office monthly and prepares everything for the accountants. It’s very efficient and cost effective.
We have them do everything for £600 plus monthly payroll £10 person plus year end about £1k in all it’s about £11k a year inc advice, our tax returns etc.
Would the management accounts be the priority? It is for us and found the most efficient way is to have a person who is attached to our accountants come to the office monthly and prepares everything for the accountants. It’s very efficient and cost effective.
We have them do everything for £600 plus monthly payroll £10 person plus year end about £1k in all it’s about £11k a year inc advice, our tax returns etc.
So it this individual 'attached' to your accountants a book keeper? If so, were they sourced by you or a service provided by the accountants?
That kind of 'half way house' solution seems very workable to me. Just benchmarking the costs, we get charged £10+VAT for each (individual) payroll, too. Are you Liverpool based?
That kind of 'half way house' solution seems very workable to me. Just benchmarking the costs, we get charged £10+VAT for each (individual) payroll, too. Are you Liverpool based?
bolidemichael said:
So it this individual 'attached' to your accountants a book keeper? If so, were they sourced by you or a service provided by the accountants?
That kind of 'half way house' solution seems very workable to me. Just benchmarking the costs, we get charged £10+VAT for each (individual) payroll, too. Are you Liverpool based?
Yes and yes and provided by accountants. She does 10+ companies a month physically attending each one.That kind of 'half way house' solution seems very workable to me. Just benchmarking the costs, we get charged £10+VAT for each (individual) payroll, too. Are you Liverpool based?
Payroll is also a division of our accountants.
Before I retired, I had a similar set up to DS Liverpool.
In the latter few years we actually employed the bookkeeper on a self employed basis as she decided to set up on her own.
having the monthly accounts prepared in house means you have control over the timing, which appears to be the issue that needs addressing.
My company was much smaller but I don’t that is particularly relevant.
Good luck in sorting this.
In the latter few years we actually employed the bookkeeper on a self employed basis as she decided to set up on her own.
having the monthly accounts prepared in house means you have control over the timing, which appears to be the issue that needs addressing.
My company was much smaller but I don’t that is particularly relevant.
Good luck in sorting this.
Can you not simply advise your current accountants that the needs of the business have changed, and what you wish for in terms of SLA’s need to be adjusted?
Just explain to them that you’re happy to pay more along the lines of what they would expect for your desired SLA’s, however should you feel that your expectations are not met with the revised pricing, then you will be going to market for the services elsewhere.
See what they come back with, either they will improve at the current rate (they agree they’re underperforming) or they will use it as an opportunity to charge you more (they genuinely feel they’re not charging you enough).
If the increase is too significant then look elsewhere.
Just explain to them that you’re happy to pay more along the lines of what they would expect for your desired SLA’s, however should you feel that your expectations are not met with the revised pricing, then you will be going to market for the services elsewhere.
See what they come back with, either they will improve at the current rate (they agree they’re underperforming) or they will use it as an opportunity to charge you more (they genuinely feel they’re not charging you enough).
If the increase is too significant then look elsewhere.
bolidemichael said:
We handle the transaction ledgers, prepare the monthly hours (where applicable), salaries, holidays deduction etc.
They handle non-transactional ledgers, which is a nice to have as it saves us more admin in house.
Of course, they do this with a view to the necessary taxable submissions, they handle the VAT returns and quarterly EC declarations.
OP - out of interest what do you refer to as "non-transactional ledger"?They handle non-transactional ledgers, which is a nice to have as it saves us more admin in house.
Of course, they do this with a view to the necessary taxable submissions, they handle the VAT returns and quarterly EC declarations.
In terms of the other stuff, I assume you enter the information into a system which then interfaces with your Accountant's system so that he can run the payroll and your MI?
It's hard to know whether £5k + VAT is cheap or expensive because its not clear to me how much you do in-house and how much your Accountant does. However his turnaround time for EOM reports is ridiculous. It should not be that difficult for MI reports to be done in-house and, depending on what system you use, it should minimise the amount of time your Accountant needs to spend on VAT and EOY submissions.
Find out what system your Accountant uses, and ask him if there would be any benefits in you entering the information direct. Alternatively have a look at something like Xero or Quickbooks and bring the bulk of the accounting in-house.
Thanks for the engagement (all).
We both use Sage 50, so are co-ordinated in this respect.
By non-transactional ledger (my lack of accounting formalities revealing themselves here), I mean utility bills, fuel, expenses - everything that isn't directly involved with buying and selling. They also handle the foreign currency transactions.
We both use Sage 50, so are co-ordinated in this respect.
By non-transactional ledger (my lack of accounting formalities revealing themselves here), I mean utility bills, fuel, expenses - everything that isn't directly involved with buying and selling. They also handle the foreign currency transactions.
bolidemichael said:
Thanks for the engagement (all).
We both use Sage 50, so are co-ordinated in this respect.
By non-transactional ledger (my lack of accounting formalities revealing themselves here), I mean utility bills, fuel, expenses - everything that isn't directly involved with buying and selling. They also handle the foreign currency transactions.
Assuming all your Sales/Cost of Sales stuff is already on Sage it shouldn't be too hard to put all the other costs on there.....?We both use Sage 50, so are co-ordinated in this respect.
By non-transactional ledger (my lack of accounting formalities revealing themselves here), I mean utility bills, fuel, expenses - everything that isn't directly involved with buying and selling. They also handle the foreign currency transactions.
To be honest it's a bit of a "How long is a piece of string" question. Without knowing the volume of transactions you have going through your books, how much more work would be needed to get to a stage where your system can produce a trial balance, how your payroll costs are posted into your ledger etc etc , its hard for anybody to say whether £5k is good value or not.
Systems like Xero and Sage can automate a lot of the bookkeeping but it does need somebody who knows how the nuts and bolts of the finance and business processes work.
I'd suggest phoning a couple of local accountants and asking how much they would want,
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